SLUC: Who’s Hot and What’s NotSLUC:  Who s Hot and What s Not

Prepared by: Maxfield Research, Inc.

February 27, 2013February 27, 2013

Metro Area Growth 

2

Size of Millennials and Seniors

• Size of the US Population (2010 Census)• 18 to 24 30,672,088• 25 to 44 82,134,554• 45 to 64 81 489 445• 45 to 64 81,489,445• 65 or older 40,267,984

3

Growth of Millennials and Seniors

900000

Growth of Millennials and SeniorsTCMA

300000

400000

500000

600000

700000

800000

al Pop

ulation

25‐34

65+

0

100000

200000

300000

2015 2020 2025 2030 2035 2040

Tot

4

Household Renter Rates by Age‐TCMA

1990 201015‐24 85%25‐34 46%35‐44 23%

15‐24 84%25‐34 48%35‐44 29%35 44 23%

45‐54 20%55‐64 16%65 74 22%

35 44 29%45‐54 20%55‐64 17%65 74 17%65‐74 22%

75+ 40%65‐74 17%75+ 31%

5

TCMA Employment Growth

2009 2011Total Employment 1,541,281 1,563,725

Gross Job Gains 117 865 135 943Gross Job Gains 117,865 135,943

Gross Job Losses 184,381 102,811

Job Gains from Expansion 86,787 106,479

Job Losses from Contraction 143,127 77,444

6

TCMA Employment Growth

2009 2011Total Employment 1,541,281 1,563,725

Gross Job Gains 117 865 135 943Gross Job Gains 117,865 135,943

Gross Job Losses 184,381 102,811

Job Gains from Expansion 86,787 106,479

Job Losses from Contraction 143,127 77,444

7

Rental Vacancy Rates in the TCMA

Source:  Marquette Advisors: Market Trends Report

8

Apartment Construction & Absorption

9

Source: Marquette Advisors: Market Trends Report

Apartment Unit Absorption

10

Source: Marquette Adivsors

Twin Cities Rental Pipeline

Twin Cities Pipeline-Apts/Senior

3000

3500

General OCC. Senior

2000

2500

ber

of U

nits

1000

1500

Num

b

0

500

11

2011 2012 2013 2014 2015

What Can We Expect?

Convenience and preference for other leisure time activities will continue to drive households to the rental market (younger and older people)

Millennials are likely to continue renting for a longer time than did their parents

As rents move higher, a portion of households may consider owning a townhomeOr condominium to achieve convenience.  However, ongoing upkeep costs are more regulated than optional (appreciation likely to remain modest in the short‐term) 

By 2014, we will see vacancy rates rise again to at least the market equilibrium level and potentially higher in submarkets with significant construction.  This may spur some additional development in suburban locations.

Average project absorption rates are likely to slow from their current rate of about 25 to 30 units per month to about 15 units per month by mid‐2014. 

12

Multifamily Construction Trends

What is being built

Where is it being builtg

Who is building ItWho is building It

Rick FenskeBusiness Development Vice President612.243.5000rickfenske@weisbuilders.com

MULTIFAMILY CONSTRUCTION STARTS BY PRODUCT TYPE7‐COUNTY TWIN CITIES METRO AREA, 2008‐2012

Student5%

Condo1%

Senior 30%

Market Rate47%

Aff d bl S

Affordable13%

Affordable Sr.4%

MULTIFAMILY CONSTRUCTION STARTS BY PRODUCT TYPE7‐COUNTY TWIN CITIES METRO AREA, 2008‐2012

8,000

9,000

399Student

8,010

6 000

7,000169Condominium

Market Rate

Affordable

Aff d bl S i

5,000

6,000

4,820

Affordable Senior

Senior

3,963

3,000

4,000

1,473

186

197

2 080

2,587

1 000

2,000

1 699

208

194

141

387 304

179

400 1,100

955586

7684828

125

1862,0801,716

0

1,000

2008 2009 2010 2011 2012

498 6051,246

1,6991,381164 96

387 304

Distribution of Multifamily Product Built 2008‐20122008 2012

Distribution of Market Rate Housing Built 2008‐2012Built 2008 2012

Distribution of Senior Housing Built 2008‐2012Built 2008 2012

Distribution of Affordable Product Built 2008‐2012Built 2008 2012

Distribution of Multifamily Product Built 2008‐2012Built 2008 2012

Most Active Cities for Multifamily Development Twin Cites Metro, 2008 to 2012,

City ProjectsUnits Built

% of all MF Units

Minneapolis 65 7,016 39%

St. Paul 17 2,217 12%

l i 11 1 109 6%Bloomington 11 1,109 6%

St. Louis Park 6 717 4%

Lakeville 5 477 3%Lakeville 5 477 3%

Woodbury 4 447 2%

Edina 4 365 2%

Maplewood 4 354 2%

Ramsey 2 293 2%

Maple Grove 3 260 1%Maple Grove 3 260 1%

Most Active Cities for Multifamily Development Twin Cites Metro, 2008 to 2012,

CityTotal Units 

BuiltMarket Rate*

Senior(Market)

Senior (Affordable) Affordable Student

Minneapolis 7,016 4,680 77 138 1,036 935

St. Paul 2,217 1,199 371 50 597 ‐

Bloomington 1 109 516 466 77 50Bloomington 1,109 516 466 77 50 ‐

St. Louis Park 717 602 115 ‐ ‐ ‐

Lakeville 477 ‐ 350 87 40 ‐

Woodbury 447 372 30 45 ‐ ‐

Edina 365 150 215 ‐ ‐ ‐

M l d 354 250 40 64Maplewood 354 ‐ 250 40 64 ‐

Ramsey 293 293 ‐ ‐ ‐ ‐

Maple Grove 260 ‐ 158 ‐ 102 ‐p

* Market Rate figures includes general occupancy rental and condominium units

Multifamily Development in MinneapolisBuilt 2008‐2012Built 2008 2012

U of MNorth Loop

L i

Loop

DowntownLoring Park

Uptown

Most Active Neighborhoods for Multifamily Construction Minneapolis 2008 to 2012Construction Minneapolis, 2008 to 2012

Minneapolis Units Built % of all MFMinneapolis           Neighborhood Projects

Units Built % of all MF Units in Mpls.

U of M 18 1,627 23%

U t 10 1 273 18%Uptown 10 1,273 18%

North Loop 8 1,198 17%

Downtown Core 4 783 11%

Loring Park 3 671 10%

Hiawatha Corridor 7 544 8%

Subtotal 50 6,096 87%

Most Active Multifamily Developers T i Ci M 2008 2012Twin Cites Metro, 2008 to 2012

Organization Units Built Product TypeOrganization Units Built Product  Type

Presbyterian Homes* 1,017 Senior Housing

Greco 950 Market Rate/Senior

Southview Senior Living 728 Senior Housing

Gunsbury 651 Market Rate/Student

Doran 567 Student/Market Rate

TE Miller 555 Market Rate

Sherman Associates 494 Affordable/Market Rate

Opus 471 Market Rate/StudentOpus 471 Market Rate/Student

Dakota County C.D.A.* 456 Affordable (Senior & Family)

Village Green 429 Market Rate

Dominium 396 Affordable (Artist)

* Not‐For‐Profit Organization

Most Active Market Rate Housing Developers T i Ci M 2008 2012Twin Cites Metro, 2008 to 2012

Organization Projects Units BuiltOrganization Projects Units Built

Greco 5 742

Gunsbury 6 651

TE Miller 4 555

Village Green 2 429

St t C ’ 2 358Stuart Co.’s 2 358

Magellan Development 1 354

City of St. Paul 2 314

Richdale Group 1 282

LeCesse 1 254

Stonebridge 2 241

* Gunsbury and Miller co‐developed 3 projects totaling 441 units. The above figures include these units in both developers totals

Most Active Affordable Housing Developers T i Ci M 2008 2012Twin Cites Metro, 2008 to 2012

Organization Projects Units Built

Dakota County CDA* 9 456

Dominium 2 396

Sh A i t 4 316Sherman Associates 4 316

Sand Company 4 299

Aeon* 4 235

CommonBond* 5 233

Catholic Charities* 2 170

Dunbar Development 3 149

Project For Pride In Living* 3 134

Portico* 3 114Portico 3 114

* Not‐For‐Profit Organization

Most Active Senior Housing Developers T i Ci M 2008 2012Twin Cites Metro, 2008 to 2012

Organization Projects Units Builtg j

Presbyterian Homes* 7 1,017

Southview 7 728

Shelter Corp/The Waters 3 306

Ecumen* 2 304

United Properties 4 265United Properties 4 265

Ebenezer* 4 264

White Pines 5 255

Walker ElderCare* 2 220

Greco 2 208

V l t f A i * 1 179Volunteers of America* 1 179

* Not‐For‐Profit Organization

Senior Housing Construction Trends T i Ci i MTwin Cities Metro 

1,800

1,400

1,600

Memory Care

Assisted Living

Ind. w/ Services

Limited Services

1,000

1,200

600

800

200

400

01980‐83 1984‐87 1988‐91 1992‐95 1996‐99 2000‐03 2004‐06 2007‐10 2011‐13

Rick FenskeRick FenskeBusiness Development Vice Presidentp

612.243.5000i kf k @ i b ildrickfenske@weisbuilders.com